UK Water Shortage Threatens Datacentre Growth, Industry Warns Government

The UK will not have enough water for future datacentres, the water industry has said in stark criticism of the government’s AI growth plans.

Datacentres rely on large amounts of water to manage the heat generated by densely packed servers. Cooling towers, chillers and humidification systems make direct use of this water, with large volumes also consumed indirectly through high electrical power needs.

Water UK, the trade body that represents water companies in Britain and Northern Ireland, said in a publicly available written briefing to MPs that the government’s water forecasts were “fatally flawed” and “explicitly exclude” datacentres.

It wrote that the government “makes not a single mention of water” in its policy for delivering AI growth zones, its AI for science strategy or its AI opportunities action plan.

It added that the Environment Agency’s most recent national framework for water resources, published in June 2025, also failed to include an estimate of the water demands of datacentres.

“There appears to be an assumption that the country will always have enough water for its economic needs,” the briefing said. “Nothing could be further from the truth.”

In May, a House of Lords report said England faced a 5bn litre a day shortfall for public water supplies by 2055.

Water UK said datacentres were already being built in water-stressed areas, with more than three-quarters located in the south and east of England. Millions of people in these regions have been placed under a hosepipe ban by water companies after prolonged extreme heat and lack of rainfall.

The trade body said any new datacentre growth in these areas “may be impossible” without policy change because of existing pressure on the network.

“As leakage and demand targets are already very ambitious, the only solution to deliver new supply is to increase the amount of water taken from the environment – which may be harmful – or to build new supplies, and major reservoirs can take 15 years to plan and build,” Water UK wrote.

It added: “Water companies have cut leakage by around 40% since privatisation and plan to reduce it by a further 17% by 2030.”

However, Greenpeace said last week that water companies were wasting five times more water through leaky pipes than even a national hosepipe ban would save.

The UK’s highest concentration of datacentres is in Slough, which is served by Affinity Water. About 125 datacentres are proposed or under construction in Affinity’s region, much of which is subject to a hosepipe ban.

In May, the company told MPs that some of these datacentres were requesting up to 3m litres of water a day, equivalent to the peak water demand of 3,500 homes.

“The planning framework is built around household growth and per-capita consumption, and has not adapted to commercial users whose water needs can match those of a market town,” Affinity said in a written submission to the environmental audit select committee.

Because of Environment Agency permitting, datacentres are currently required to make use of drinking water only. Water UK estimated that datacentres in England use 6.6m litres of drinking water every day. With the government’s ambition to triple datacentre capacity by 2030, this could increase to 19.8m litres a day.

Jon Chappel, Water UK’s deputy director, said this was “unforgivable” and a “genuine failing of government”.

England’s current water shortfall is 220m litres more a day than was assumed in water forecasts. Water UK said this deficit was currently being met by “accepting a greater risk of environmental harm, and restrictions on water use in the event of drought”.

Similar concerns have been raised in Ireland, where hosepipe bans have ignited criticism of water companies and the government over a lack of clarity about datacentres’ water usage.

The government has designated datacentres as critical national infrastructure, on the basis that their loss or compromise could result in “major detrimental impact on the availability, integrity or delivery of essential services” and “significant impact on national security, national defence, or the functioning of the state”.

Oliver Hayes, head of big tech and campaigns at the campaign group Global Action Plan, said it was not clear why datacentres had been given this status, but that water companies may be powerless to restrict their water use as a result. This could risk datacentres being prioritised over households at times of peak water demand.

“I think it is highly likely that we’re going to end up seeing datacentres that are actually running chatbots, or enabling people to do benign and very wasteful, pointless things, protected and given favourable treatment when it comes to resources,” Hayes said.

Chappel said Water UK had asked the government to publish a drought hierarchy to set out which sectors are prioritised in times of water shortages, but that ministers had yet to do so.

“Without this there will be a trade-off across society” he said.

At the end of June, water companies, the water regulator Ofwat, the Environment Agency, the Met Office and the Welsh government-sponsored body Natural Resources Wales announced a £75m campaign to encourage people to use less water. Water use per person in England and Wales is among the highest in Europe.

The government was expected to publish a national policy statement for AI growth in February, providing an overarching strategy and defining how cumulative impacts are considered, but this has been delayed.

A government spokesperson said: “The environment and sustainable development must go hand-in-hand and we will protect our water supply while unlocking growth, including looking at alternatives or ways to minimise impact on supplies and output of wastewater from datacentres.

“We are also taking decisive measures to secure water supplies and meet higher demand, including record levels of infrastructure investment and building nine new reservoirs.”